The Main Production Methods | Business Studies for GCSE/IGCSE - Year 11 PDF Download

Different Types of Production Processes

• Companies have the flexibility to structure their production processes in different manners.

Methods of Production

The production method selected by a business depends on several factors:

• Desired output volume.
• Nature of the product.
• Standardization or customization of the product.
• Level of automation in production.

Assessing the Methods of Production

Recommending an Appropriate Production Method

• Small scale businesses typically opt for job or batch production due to limited resources, while large scale businesses often favor flow production to meet high product demand.
• Various factors play a role in determining the choice of production methods for a business.

Factors Affecting the Choice of Production Method

• The level of demand plays a crucial role: 
  • Flow production may be justified by high demand.
• Target market characteristics are significant:
  • Price-sensitive markets may necessitate high-volume, standardized products.
  • High-quality customized products typically require job production.
• Product nature dictates suitable production methods:
  • Certain products may only be feasible with specific methods; for instance, sports stadiums require job production.
• Comparative costs of labor and capital influence decisions:
  • Large firms tend to invest in automation to minimize labor costs.
  • Availability of cheap labor can favor labor-intensive methods like job or batch production.
• Firm characteristics are considered:
  • Small firms may lack funds for investment in flow production.
• Technological advancements impact production methods:
  • Accessible technologies enable smaller firms to afford previously unattainable equipment, potentially increasing flow production levels.
• Business objectives guide decisions:
  • Firms aiming for market growth and profitability may opt for flow production.
  • Small firms may leverage job production methods to differentiate themselves, such as promoting "hand-made" products.
• Government policies can influence:
  • Economic growth may be stimulated by government incentives like subsidies and tax breaks for technology investments.